BTIG Thinks Amentum Is Undervalued with New Catalysts in Play

Amentum Holdings Inc. (NYSE:AMTM) is one of the 20 undervalued momentum stocks that are taking off. BTIG analyst Andre Madrid reiterated a Buy rating on Amentum Holdings Inc. on June 3, maintaining a $30 price target. His view reflects several developments that could support both operational performance and investor sentiment.

First among those developments is the complete exit of Jacobs Solutions from Amentum’s ownership. With Jacobs distributing its remaining 7.3 million shares, Amentum’s public float has expanded, improving the stock’s liquidity. As is typical for increased float, Madrid sees this as a positive shift that may broaden institutional interest and trading activity.

BTIG Thinks Amentum Is Undervalued with New Catalysts in Play

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The analyst also highlighted that the company has received a potential $4 billion contract with the U.S. Space Force. If the company successfully completes this project, it has the potential to further establish the company’s reputation in managing larger, high-value government projects.

Madrid also highlighted recent internal restructuring efforts. Recently, Amentum sold its Rapid Solutions unit and the proceeds from this divestiture are expected to help reduce debt, which would further bolster the balance sheet. It also revised its accounting methods for joint ventures, which should help the company in simplifying its structure and improve financial controls.

The analyst also highlights that Amentum’s valuation remains compelling, trading at around 10 times EV/EBITDA. In his view, this supports a bullish outlook on the stock.

Amentum was formed on September 27, 2024, through the merger of the legacy Amentum business with a spin-off of Jacobs Solutions Inc.’s Critical Mission Solutions business, along with parts of the Jacobs Divergent Solutions business. The company delivers advanced engineering and technology solutions to a wide range of U.S. and allied government agencies, as well as commercial enterprises.

While we acknowledge the potential of AMTM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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